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deff fn [24]
3 years ago
10

The money multiplier equals:________.

Business
2 answers:
Serjik [45]3 years ago
8 0

Answer: B. 1/R, where R represents the reserve ratio for all banks in the economy.

Explanation:

The Money Multiplier is the money that Banks generate given a certain RESERVE REQUIREMENT/RATIO.

A Reserve Requirement is money that the Central Bank requires that Banks do not loan out and instead keep in reserve.

For example, if the reserve rate is 10% and a bank has $10 they can only loan out $9.

Assuming they loan out $9 then they created $19 in the economy because their customers still own the original $10 but now they have also given loans of $9. The people who take the loans then deposit it in another bank. That bank would keep $0.90 in reserve and loan out $8.10 meaning that $27.10 now exists in the economy.

The process goes on and on until it gets to $100.

A simpler way to get to the final figure is to divide 1 by the reserve requirement = 1/r which is the money multiplier.

Using the above example, that would be 1/0.1 which is 10.

Multiplying this 10 by the initial deposit of $10 will give you that same $100.

nordsb [41]3 years ago
5 0

Answer:

B. 1/R, where R represents the reserve ratio for all banks in the economy.

Explanation:

Money multiplier is a term used to relate the maximum amount of commercial bank money that can be created, given a certain amount of central bank money.

Money multiplier simply tells you about the maximum amount of money supply that could be increased based on an increase in reserves within the banking system.

By simple terms,

The formula for the money multiplier = 1/r

where, r = the reserve ratio.

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Centrifuge is a device used to separate solid components .true or false​
kap26 [50]

Answer: True

Explanation: Hope This Helps :)

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3 years ago
An employee who is responsible for planning, directing, and monitoring the work of other employees is a ________.
dem82 [27]

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Manager

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an employee who is responsible for planning, directing, and monitoring the work of other employees is a manager

Hope this helped and have a good day

6 0
2 years ago
easynotrcards Under a fixed exchange rate regime, if the domestic currency is initially undervalued, that is, above par, the cen
Alina [70]

Answer:

D) foreign; domestic

Explanation:

The central Bank can improve the domestic currency by using the reserves. If the domestic currency undervalued the central bank may intervene to sell the Foreign currency and purchase the domestic currency, which will increase the demand of domestic currency and increase the supply of foreign currency in the market which will improve the value of domestic currency and undervalue the foreign currency.

7 0
3 years ago
Read 2 more answers
A store offers two payment plans. Under the installment plan, you pay 25% down and 25% of the purchase price in each of the next
aev [14]

Answer:

a-1. The present value of Plan 1 = $93.08

a-2. The deal 2 which involves paying immediately adn taking the 10% discount is better.

Explanation:

a-1.

The interest rate of 5% is taken as the discount rate to convert future cash flows into the present value.

The First payment plan with installments has a present value of,

Present Value-Plan 1 = 25 + 25/1.05 + 25/1.05² + 25/1.05³ = $93.08

a-2.

The first plan will cost $93.08 in the present value.

The second plan will involve immediate payment and a discount of 10%vwhch makes the present value of plan 2 as $90 (100 - (100*0.1)).

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6 0
3 years ago
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